These financial problems are unique for young adults, whether it’s figuring out how you save for retirement or addressing student loan debt. Lack of adequate insurance is something that millennials often neglect. In fact, millennials are more likely to have inadequate insurance than older people. When you are just starting out in your career, it’s easy to believe you don’t require life insurance. You might want to consider these reasons why you should buy it sooner than later.
Your age and general health are two of the factors that determine your life insurance premiums. The less coverage you have, the more you will pay. This holds true even if you aren’t a smoker or have no pre-existing conditions. You are less of an insurance company liability if you’re young and healthy. You’ll notice a significant increase in monthly costs if you wait until you are in your thirties and forties to purchase life insurance. You can lock in a rate that will last for the remainder of your policy by looking at rates right away, which will save you money.
2. Funerals can be expensive
Average funerals cost between $6,000 to $10,000. Even if you are planning for a non-traditional funeral, such as an end-of life party, someone will need to pay the bill. You can get help with this by purchasing a small life insurance policy.
3. You don’t want to leave your family in debt
It is no secret that today’s graduates are saddled with unprecedented student loan debt. Your parents could be responsible for paying off your debts if something happens to you. If your parents took out a PLUS loan and you are making payments, the balance will fall on their plates if you die suddenly.
Another example is if you have credit card debt from a joint account. Perhaps you’ve just purchased a house and you and your spouse have co-signed a lease. Consider whether your spouse is able to take on the entire load. You can solve all your financial problems by purchasing enough life insurance. This will make it easier for your family to cope with the loss of you.
4. Some policies offer built-in savings
Many financial professionals would recommend a life policy to millennials. However, it is worth looking at whole-life insurance. This permanent insurance protects you up to the day you die. Although it is more expensive than term life in terms of premiums, the policy grows tax-free over time and accumulates cash value. This cash value can be used to make future loans. A life insurance policy can be used as a savings vehicle, but it comes with a low risk. You have likely many years to save and this cash value policy could be a great addition to your nest egg.
5. You have children
Many millennials have waited longer to marry and have children. Even if you are able to get married early, it is important that your children are taken care of in any case. This is especially important for a spouse who is a stay at home parent. They would need to be able to replace your income stream temporarily. Even if you are both employed, life insurance can still be useful when it comes to paying for higher education.
6. Your employer’s insurance may not be enough
If you are lucky enough to find a job with great benefits, your employer may offer you some life insurance. Workplace coverage may seem sufficient for millennials without a family. However, purchasing a separate policy is still a smart decision.
It can pay for you if you are diagnosed with a serious illness that renders you incapable of working. You may be eligible to borrow against your insurance to pay for your medical expenses if your health insurance is canceled. In the event that you are laid off, your job changes or your employer goes outof business, another insurance policy could cover you.
7. Your employer’s insurance may not be the best one for you
Although you may be offered life insurance by your employer, it can still be more costly to add coverage than to purchase a separate policy. Your employer may offer group life insurance that is more affordable. You might not get the features you are most interested in. Additionally, premiums for employer-sponsored policies increase dramatically after the age of 35.